Venture Capital, First-mover Advantages And Capital Structure Of New Ventures

Capital structure theory is considered as an important topic in the field of theory and practice. Through the first-mover advantages of new ventures, this paper investigates the mechanism of venture capital affects the capital structure of new ventures. This research can not only reveal the mechanism of venture capital affects the capital structure of new ventures, but also further prove that VC-financed new ventures can gain obvious first-mover advantages. It will enrich the study of the role of venture capital for new ventures.Using a sample of year2009to2011listed companies in Shenzhen GEM, also using the mediation method of Baron and Kenny (1986) and based on the Wind database of GEM board listed companies and hand-collected data of venture capital holdings, this paper investigates how venture capital affects the capital structure of new ventures.First, venture capital can affect proactiveness and first-mover advantages of new ventures. VC-financed new ventures exhibit strong proactiveness than non-VC-financed. VC-financed new ventures can gain obvious first-mover advantages than non-VC-financed. Second, different characteristics venture capital produce different first-mover advantages to new ventures. Strong ability VC-backed new ventures can gain obvious first-mover advantages than weak ability VC-backed. Syndicated venture capital can give obvious first-mover advantages to new ventures than non-syndicated venture capital. Third, different characteristics venture capital produce different to new ventures. Strong ability VC-backed new ventures use higher capital structure than weak ability VC-backed. new ventures Syndicated VC-backed new ventures use higher capital structure than non-syndicated VC-backed new ventures. Fourth, the empirical results show that the first-mover advantages act partial mediation between venture capital and the capital structure of new ventures; that is to say that venture capital affects the capital structure of new ventures through the first-mover advantages.The mainly value and innovation of this paper as follows:First, reveal the mechanism of ability and syndicated of venture capital affect the first-mover advantages and venture capital of new ventures. It will enrich the study of first-mover advantages theory and capital structure theory. Second, reveal the mechanism of different property nature of the venture capital affect the first-mover advantages and venture capital of new ventures. Third, reveal the mechanism of venture capital affect venture capital of new ventures baded on the first-mover advantages of new ventures. It will take a step forward to enrich the theory of venture capital, first-mover advantages and the theory of the capital structure of new ventures.This paper is divided into seven parts. In addition to two chapters of the introduction and conclusion, the remaining chapters include literature review, financing and background analysis of new ventures, characteristics of venture capital and first-mover advantages of new ventures, venture capital affect proactiveness and first-mover advantages of new ventures, and first-mover advantages act partial mediation between venture capital and the capital structure of new ventures.